MainWorldwideUS, China may pursue talks over trade differences -USTR official

US, China may pursue talks over trade differences -USTR official

05 April, 2018

Unlike Washington's list, which was filled with many obscure industrial items, China's list strikes at signature USA exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Trump in the 2016 presidential election. PresidentDonald Trump's top economic adviser, Larry Kudlow, suggested the US tariffs won't be implemented if China lowers barriers to trade.

Global markets have been hit hard by the Chinese announcement, as have the products on the list and the companies making them.

In the brewing trade-war between the US and China, the list of losers already outweighs the winners.

A list the U.S. issued on Tuesday of products subject to tariff hikes included aerospace, telecoms and machinery, striking at hi-tech industries seen by China's leaders as the key to its economic future. "That is not viable", Chinese Vice Commerce Minister Wang Shouwen told media briefing here today when asked about Trump's demand. "Our action is restrained".

Commerce Secretary Wilbur Ross saidChina's response isn't expected to disrupt the USA economy. He said the USA isn't entering "World War III" and left the door open for a negotiated solution.

The tit-for-tat action comes hours after Washington detailed about 1,300 Chinese products it meant to hit with tariffs - also set at 25%.

The larger concern, Ross said, is the protection of USA intellectual property. Ross said he would not comment on the stock market's reaction, but then said he thinks "it's being out of proportion".

Soybeans, the top USA agricultural export to China, were among the 106 US products on which Beijing announced additional tariffs.

It released a list of 1,300 imported Chinese products, including industrial robots and telecoms gear, to protest Beijing's alleged theft of US technology.

The dispute "may compel countries to pick sides", said Weiliang Chang of Mizuho Bank in a report.

Li said the trade imbalance could be solved if the USA eased restrictions on high technology exports to China. -China Business Council, an industry group. "Tariffs are taxes on consumers and a drag on the nation's economy", National Retail Federation President Matthew Shay said in a statement Wednesday.

Chinese hackers are also suspected in a backdoor attack revealed last September on popular file cleaning software CCleaner, apparently orchestrated to gain access to major tech companies like Google and Microsoft. Analysts sayChina could make up some of the shortfall by importing from Brazil. "China's response is a surprise for some people", said Julian Evans-Pritchard, Senior China Economist at Capital Economics, noting that neither said had yet called for enforcement of the tariffs.

The list includes parts of communication satellites, semiconductors, aviation equipment and brewery machinery, as well as more niche products such as bakery ovens and rocket launchers. That excludes high-end Boeing jetliners such as the 747 and 777, leaving Beijing high-profile targets for possible future conflicts.

Also on Wednesday, analysts warned that the United States automobile industry would suffer under the new tariffs - with BMW, Mercedes-Benz and the already embattled Tesla among the worst hit.

As for the scuffle with China, Kotok said he's hopeful that much of this is bluster from the Trump administration.

United States chemicals, some types of aircraft and corn products are among the goods facing the taxes, the finance ministry said.

Bernstein said in a note Wednesday that BMW sends 89,000 vehicles annually from the U.S. to China while Daimler AG's Mercedes-Benz ships 65,000. Regulators could withhold licenses or alter other conditions to hamper foreign business activity.

The second battle, involving USA claims of unfair Chinese actions targeting intellectual property, began on March 22 with Trump's order to trade officials to draw up a list of Chinese products to hit.

The date of implementation will depend on when the US government imposes the tariffs on Chinese products, the MOF said.

If enforced, the measures announced by Beijing earlier would increase tariffs on cars from the United States to 50 per cent from the usual 25 per cent. "We will see what the USA will do", he added.

But Trump is also focused on his promise to voters to reinvigorate US manufacturing jobs.

Previously, Trump approved higher import duties on Chinese-made washing machines and solar modules to offset what Washington said were improper subsidies. Barriers to trade would obviously hurt US exporters.

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